SK Hynix tumbled nearly 13% on Tuesday, July 28, dragging down Samsung Electronics which also slid more than 12% amid a broad sell-off in Asian tech stocks. The sudden drop wiped billions from market values across South Korea, Japan, and Taiwan in a single day, continuing a downward trend hitting AI-focused chipmakers after Wall Street flagged concerns.

The pressure on the sector intensified following reports about Nvidia’s financial support plans for OpenAI, which rattled investors overnight. Nvidia is reportedly negotiating a $250 billion guarantee to back OpenAI’s lease of a massive 10-gigawatt data center in Ohio, a project potentially exceeding $500 billion in total costs. also Nvidia may provide financing for OpenAI’s chip purchases worth up to $350 billion. Rather than inspiring confidence, some investors view Nvidia’s role as a financial safety net as a sign that AI chip demand might be more fragile than expected.

Further complicating the space, Chinese memory maker CXMT made a striking debut on the Shanghai stock exchange, with shares surging up to 500% above their IPO price, valuing the company near $515 billion. This surge highlights mounting competitive pressures. plus state-backed Chinese firms have started mass-producing deep ultraviolet lithography machines domestically, reducing Beijing’s dependence on Dutch supplier ASML for advanced chip manufacturing equipment.

Analysts from Seoul Economic Daily estimate that the technology gap in high-bandwidth memory between CXMT and Korean leaders SK Hynix and Samsung has shrunk from over five years to just three. This narrowing gap threatens to undermine the AI chip contracts these Korean giants have secured with major US hyperscalers.

Volatility continues to shake SK Hynix and Samsung, the flagship companies on South Korea’s KOSPI index. Investors anxiously await SK Hynix’s upcoming quarterly earnings report, which could reveal whether AI-driven demand still justifies the current market turbulence.

Owen Lamont, senior vice president at Acadian Asset Management, emphasized the uncertainty clouding AI’s economic impact. He noted that "no one has any idea how this AI process is going to affect our economy," suggesting choppy markets will likely persist. Lamont also pointed to leveraged exchange-traded products as factors magnifying market swings, particularly in Korea, Hong Kong, and the US.

Despite the turmoil, some analysts retain a longer-term bullish outlook. Sundeep Gantori, chief investment officer at Standard Chartered, argues that memory makers still stand to benefit, citing forecasts that predict a peak in memory prices by 2027.

This episode follows a broader sell-off in Asian tech stocks amid growing AI concerns, similar to earlier market drops seen across the region.